Levies proposed for new developments to fund affordable housing

Newcastle developments would be hit with a new levy of up to 5 per cent which would be used to boost supply of affordable housing across the city.

City of Newcastle's Affordable Housing Contribution Scheme Planning Proposal sets out how contributions for affordable housing would be levied on new development.

Larger developments in Stockton, two areas of Broadmeadow and the western corridor (Minmi, Fletcher and Maryland) will be subjected to a contribution rate of 3.3 to 5 per cent based on their size.

For example, the equivalent monetary contribution rate for a development in Stockton North would be $379 per square metre of gross floor area, or $300,000 per hectare of net developable area in the western corridor.

A 1 per cent contribution rate would also apply to all residential and mixed-use developments that result in an extra dwelling and more than 200 square metres of residential gross floor area in all other areas in the LGA.

A motion to the December 12 Newcastle council meeting seeks consent to forward the planning proposal to the Department of Planning and Environment for Gateway determination.

New developments would be subject to the levy to fund affordable housing. Picture by Peter Lorimer

Further testing would be undertaken on the 1 per cent rate prior to public exhibition to ensure development viability. Money from the scheme would be pooled and used for purpose-built affordable housing.

The council's draft Affordable Housing Contribution Scheme said "the need for affordable housing in Newcastle has been well researched and extensively documented".

It said between 2008 and 2023, median rents for a one bedroom unit in Newcastle increased by 57 per cent, rent for a two bedroom unit increased by 55 per cent and median rents for a three bedroom house increased by 57 per cent.

From June 2017 to December 2022, the median sale price in Newcastle increased 27 per cent.

In 2021, 26.7 per cent of dwellings were affordable for purchase by moderate income households, 0.9 per cent of dwellings were affordable to buy for low income households and less than 0.1 per cent of homes were attainable for very low income households.

The draft scheme was unanimously endorsed by a council working party in November 2023.

The council report said it was anticipated that the planning proposal and draft scheme would be publicly exhibited for at least 28 days.